• Dr. Omran: The term of the Board of Directors of the Central Depository and Registry Company is three years with a maximum of 9 years for the Chairman and Executive Members
• Dr. Omran: FRA calls for a community dialogue to discuss the ownership structure of futures exchanges and the Central Depository, Registry and Clearing Company
Dr. Mohammed Omran – FRA’s Chairman revealed that FRA’s BOD issued the first executive decisions to activate Law No. (143) of 2020 on amending some provisions of the Central Depository and Registry Law to regulate central depository and registry companies. The said Law included all provisions that regulate central depository and registry for the present markets and commodities & futures market, that is besides introducing a company that undertake central depository and registry of government securities and financial instruments.
FRA’s Chairman says that pursuant to the provisions of Article Two of the amendments to the Central Depository and Registry Law, FRA’s BOD approves the issuance of a decision that define some controls related to the Board formation of each central depository and registry company. Companies dealing in government securities and financial instruments or those dealing in future contracts or the existing company that undertakes the central deposit and registration of securities and financial instruments shall apply the said controls.
FRA’s Chairman adds that the controls include requiring the majority of Board of Directors to have previous experience, provided that the board is formed of between five and nine members. The board formations should also include at least two independent members, and at least one female member. No board member shall be allowed to hold the positions of part-time chairperson, managing director, and executive director at the same time
The election process for the Board of Directors is also carried out using cumulative voting method. The term of the Board of Directors shall be three years renewable for other periods, with a maximum of 9 years for the Chairman of the Board of Directors and the executive members, whether they represent themselves or representatives of the appointed members. Also, it is not permissible to combine membership of more than one Board of Directors at the same time.
Regarding the currently existing central depository and registry company, FRA’s BOD decided to grant it a grace period for reconciliation with regard to the controls related to the Chairman of the Board and executive members until the first election cycle following the implementation of this decision.
Dr. Omran emphasized that FRA’s BOD approved in its remote session – at the beginning of this week – the issuance of a decision defining the controls of the ownership structure of the central depository and registry company dealing with government securities and instruments. The decision would allow the Central Bank of Egypt (CBE) to have 100% ownership of a company’s shares in case the company is established by the (CBE) itself. The CBE would gain 50% ownership in case the company is partnering with another entity on the company’s capital.
On the other hand, the Chairman of the Authority called on the members of the Capital Market Advisory Committee and a number of representatives of local and international banks and financial institutions to hold a community dialogue session. This would discuss the ownership structure of futures exchanges and companies of central registry and depositary operating in futures contracts. The outputs of this session would be presented to FRA’s BOD.